“This
has, I’m sure, far-reaching implications throughout the state,”
Wyntergreen said. “Medford has already followed suit with their
own surcharge which is basically patterned after Jacksonville. I’m
sure other cities will be in line to do something similar in these times
of severe fiscal restraint.”

But
cities aren’t the only entities that are hard pressed these days
for money. Residents are too. And the court’s decision is severely
impacting the low- and middle-income people of this historic, former
gold-mining community, which has a population of between 2,500 and 2,700,
many of modest means.

That’s
because the surcharge is not necessarily paid by the property owner,
but by occupants and business owners. This means a condominium owner,
a senior on Social Security in a mobile home park, or the owner-occupant
of a small, unpretentious home pays the same fee per month as the owner
of a $300,000 home – and there are a number of new, expensive
houses in the area.

And
those fees add up. The surcharge in Jacksonville was originally $15
a month per unit, then went to $20, and is expected to go as high as
$40 or $45.

“I
would say that 80 percent of the people in here live month-to-month,
and have only a minimum savings account,” the assistant manager
of a local mobile home park told NewsWithViews.

“There
are a number of newcomers in town who are relatively wealthy and for
whom $20 or $40 more a month is nothing,” she added. “To
them it’s a small price to pay for services. But for someone in
here, $40 is a make it or break it, eat-or-don’t-eat type of payment.

“There
are people here who run out of money before their check arrives each
month – they barely get by as it is,” she said.

Theoretically,
a person can apply for a reduction, but that involves a lot of paper
work, and the assistant manager – who handles the exemption forms
for the residents at the park -- said she hasn’t seen or heard
of a case where the fee was completely cancelled. At best it might be
lowered a few dollars.

“I
don’t see any residents in here where the total amount has been
waived,” she said. “None of them. People send in their forms
to see if they qualify for a reduction, but even if they qualify it
knocks only three or four dollars off. Big Deal!”

Businesses
Hit

Paul
Hayes, owner of Cottage Antiques and one of the plaintiffs in the lawsuit,
pays $20 a month on that property because he owns it and his is the
only business in the building.

Like
Hayes, Georgeanne Crum was also a plaintiff and owns a commercial building
-- but hers has five small businesses that rent space in it, which means
the surcharge is $100 a month.

“I
pass this on to my tenants,” says Crum. “I tell them: ‘I
want you to pay the $15 (it’s $20 now) because I want you to know
what you’re paying for. We’re not putting it in our pockets.’
I’m doing this so that if there’s ever a vote where it comes
to the people, they’ll understand.”

Crum
added that although her building has spaces for five businesses, only
four are occupied at the moment and she still has to pay the fee on
the empty one.

It’s
the same for rental residences. Besides mobile homes, small apartment
complexes and duplexes are billed per unit, whether occupied or not.
That’s $40 a month for a duplex. An eight-unit would be $160.
($1,290 a year) Some owners pay the fee for the tenants, others don’t.
But it has to be paid or the water will be shut off.

The
surcharge is estimated to have generated $230,000 a year for “public
safety,” and the pressure is on the city council to increase that
to $40.

Voters Say No

What
several Jacksonville residents have described to NewsWithViews as “a
complete mess,” started in 2002 when voters rejected a $2.8 million
five-year levy on the November ballot, intended to sustain operations
of the local fire department and fund a changeover from a volunteer
to a full-time force, with paid career firefighters, new equipment,
a new fire truck and a new fire station. This would have been paid for
by the property owners, but the voters as a whole felt it was either
too expensive or not necessary or both. Whatever the reason, they said
no.

By
all accounts, the volunteer fire department was performing “excellently.”

“Jacksonville
is a very small community,” exclaimed one resident. “How
large a fire department do we really need? Do we really need a glass
building and eight fire trucks?”

With
the levy shot down, the city administration – aided by an ad hoc
committee – went back to the drawing board and came up with the
idea of a surcharge. The fee wouldn’t be just for a new fire department;
it would beef up the police department, too. The package was labeled
“Public Safety.”

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The
city council unanimously approved (some said rubberstamped) the surcharge
at its April 1 meeting the following year – despite an outpouring
of public comment against it.

Former
city Mayor Clara Wendt told the council the fee was “unacceptable,”
and accused them of “taking the coward’s way out and soaking
its citizens” by supporting the surcharge.

Having
lost the fight in the council chamber, a group of a dozen or so citizens
banded together, hired an attorney, and in September 2003 filed suit
in the Oregon Tax Court, claiming the surcharge was an unconstitutional
tax that violated Measure 5 (a 1990 citizens initiative that capped
property taxes) and Measure 50, a 1997 voter-approved provision by the
state legislature consolidating existing levies.

For
the plaintiffs it was not a fight about the fire department, but because
the surcharge was seen as an end run around constitutional restrictions
on tax levying without voter approval.

“We
opposed it for two reasons,” Paul Hayes recalled. “One,
we felt it was without question a tax. And two, there was no cap on
it. It was completely open-ended, and as a result it has gone up.”

Hayes
continued: “Normally police and fire are considered property tax
items and go into the general fund. That’s why we fought it. We
said these are property tax items and should be voted on.

“Also,
from the owner’s standpoint, a property tax is deductible –
a fee is not. So by not being part of the property tax, it’s not
deductible from your taxes. It is on my apartment rental, because it’s
an expense of the rental. But for the owner of a home it’s not
a deductible item. You can’t deduct that $20 a month ($240 a year)
the way you can deduct property and sales taxes.”

Cities
Follow Suit

In
the wake of the Supreme Court ruling, several communities near Jacksonville
-- Phoenix, Rogue River, Gold Hill, Shady Cove, and Talent – have
passed or attempted to pass similar surcharge ordinances. How many across
the state have done so is not clear, but Wyntergreen predicts others
will follow suit. Medford had already done so before the ruling came
down.

But
even with the court decision, passage is not a guaranteed slam dunk.

In
Phoenix (pop. 4,000), the city council passed a surcharge in May 2007,
just months after the state Supreme Court handed down its Jacksonville
Decision. This was a $20 monthly fee intended to cover a $700,000 budget
shortfall for police, fire protection and public works, and could total
more than $62 a month within three years.

But
Steve Brown, an Ashland police officer who lives in Phoenix, circulated
a petition and obtained enough signatures that the city was forced to
place a measure before the voters to repeal the surcharge. This was
overwhelmingly approved in an election that September.

“I
was just hoping that everybody got a chance to vote on it,” Brown
said. “It’s a two-fold issue, but the primary issue is that
when government tries to take your money they should give the voters
a chance to say whether they approve of how the government’s going
to spend it.”

An
attorney who requested that he not be named, told NewsWithViews.com
he sees no way around the Jacksonville Decision except citizen involvement,
presumably the kind shown by folks in Phoenix. He said that from now
on the best way to fight a surcharge is to make sure a city council
doesn’t pass one in the first place – but if it does, to
vote the council members out of office with the understanding that the
next council will repeal the fee.

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“Unfortunately,
if they [a city council] follow the rules the Supreme Court said they
could follow, they can pretty much do what they want,” he said.